Part 1 – Sales Promotions Properly designed promotions are more fun than advertising. Promotions should involve your employees, your customers, friends, family, neighbors, etc. All promotions should be done in a festive atmosphere. Plan the promotions so that as many customers as possible are included. Try to avoid promotions that have just one winner. It is very difficult to get people excited about one grand prize. People are more likely to
Perhaps the single biggest issue on whether a customer can successfully pay off his account is how you structured the deal. Poor deal structure will ensure you will have collection issues throughout the loan and will significantly increase your repossession and charge-off numbers. The wrong deal structure will set your customer up for failure. Many conventional Buy Here-Pay Here dealerships charge excessive gross profits and/or the maximum interest rate their
Perhaps the single biggest factor on whether a customer can successfully pay off his BHPH or LHPH account with your dealership is how you structure the deal. Poor deal structure will ensure you will have collection issues throughout the loan and will significantly increase your repossession and charge-off numbers. The wrong deal structure will set your customer up for failure. Many conventional Buy Here – Pay Here dealerships charge excessive
1. The Buy Here Pay Here business isn’t the car business, it’s the finance business. Sure, you sell cars as a part of the BHPH business but what you actually are selling is your financing program. The car just happens to be what the proceeds of that financing are used to purchase. In the car business, the higher gross profit the better, profit is realized either at the time of
I ran across an interesting article last week in Business Insider. It was about a survey released in December of last year concerning financial services done by the Federal Deposit Insurance Corporation (FDIC). The survey found that roughly 1 in every 12 US households, or some 17 million adult Americans, are “unbanked”. That means they lack a current checking or savings account. The survey also found that 1 in every 5
Many BHPH dealerships never pulled credit reports in the past. Their philosophy was, “My customers all have bad credit. I don’t need to pay for a report to tell me that.” That philosophy has been changing over the past few years and obtaining a report on all prospective customers is a “best practice” that should be adopted by all BHPH dealers. You need to obtain credit reports on your prospective
Collections are the most exciting activity at a Dealer Controlled Financing dealership. If your employees have properly worked the other processes at your dealership, then collections can be easy. The dealership can maintain a larger portfolio without increasing personnel expense. If your dealership is charging the highest interest rates allowed, extending contracts beyond the expected life of the vehicle, or treats customers like they are doing them a favor by
Tax time will soon be upon us. Buy Here – Pay Here dealers look forward to this time of the year because many dealers make a high percentage of their annual sales during this period. One dealer I read about claimed to make 80% of his sales during this quarter. That seems a too high to me and I would argue his marketing and sales efforts during the rest of
Determining who to make loans to is one of the critical factors in the success of a dealer controlled financing business. Making the wrong decisions can cause you considerable collection work and expense than making good lending decisions. Poor BHPH underwriting can increase your delinquency, stunt your cash flow and trigger excessive charge-offs. Good BHPH underwriting can help you avoid these mistakes, build your cash flow and minimize charge-offs. Effective
Do you want to improve your sales, increase collections and protect your dealership by enhancing compliance? Of course you do. The key to doing all of the above is being consistent. Sales Do you use a step-by-step sales process or do your sales people just kind of wing it with each customer? If you don’t have a step-by-step process, how do you know what is being said to your customers
